RVP Parity a Win, Win for Consumers

RFA's CEO and president addresses the need for changes in Reid vapor pressure regulations, either by EPA action or through a legislative fix. This article appears in the May print edition of Ethanol Producer Magazine.

By Bob Dinneen | April 26, 2017

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In 2016, the U.S. ethanol industry produced a record 15.25 billion gallons of clean, high-octane fuel and exported more than a billion gallons of the fuel to Brazil, China, Canada and other countries. I anticipate 2017 will be another record year for production and use, but I remain focused on growing demand for our fuel. Growing demand means expanded market opportunities for higher ethanol blends and to that end, the Renewable Fuels Association’s top priority this year is securing RVP parity for all ethanol blends.

How did we get here? In 1989, the U.S. EPA provided a Reid vapor pressure (RVP) waiver to 10 percent ethanol blends, concluding there would be no air quality consequence and retailers would otherwise be unable to secure blendstocks for ethanol blending year-round. In 2011, EPA approved the use of E15 in 2001 and newer vehicles, but the agency did not extend the same RVP waiver as it did to E10. As a result of this disparity, retailers in conventional gasoline areas (most of the country) have to secure specialty—and costly—gasoline blendstocks in order to continue selling E15 in the summer (June 1-Sept. 15).

The RFA has repeatedly urged EPA to take immediate administrative actions to eliminate this nonsensical regulatory barrier that is impeding growth in the use of E15 and other higher ethanol blends. We have provided the agency with reams of data from the U.S. DOE and independent laboratories proving that extending the RVP tolerance currently provided only to E10 would have no detrimental impact on ozone or other air quality standards. In fact, because of the increased oxygen content of higher ethanol blends, there would actually be improved air quality.

Inexplicably, the Obama administration’s EPA did not seem to understand the damage inflicted on retailers and consumers by denying RVP parity, however we have hope under this new administration. One of President Trump’s priorities is an overhaul of the regulatory code that has needlessly burdened American businesses, stymied growth and increased cost with little or no environmental or consumer benefit; EPA’s treatment of volatility for ethanol-blended gasoline is a perfect example. The failure to grant the RVP waiver has needlessly discouraged retailers from offering the fuel blend year-round and punished consumers who cannot take advantage of the lowest cost, highest octane source of fuel in the world.

There are several ways for RVP parity to be achieved. RFA has worked for years on an administrative fix. To date, EPA has been reluctant to use its statutory authority to grant an RVP tolerance for E15. EPA could also lower the volatility of conventional fuels; but, while supportive, the agency has not shown much enthusiasm for getting that done either. RFA remains optimistic that, with a new sheriff in town and a fresh look at the existing statutory authority, we might soon be able to offer the lower-priced, higher-octane E15 to consumers year-round.

Of course, a legislative fix is also possible and the RFA supports bills that have been introduced, as long as they don’t jeopardize the Renewable Fuels Standard. For example, our champions on Capitol Hill have introduced two bills that would address the issue. In early March, Sens. Deb. Fischer, R-Neb., Joe Donnelly, D-Ind., and Chuck Grassley, R-Iowa, introduced the Consumer and Fuel Retailer Choice Act (S. 517) that would extend RVP parity for ethanol blends above 10 percent. A companion bill, H.R. 1311, was also introduced in the House by Reps. Dave Loebsack, D-Iowa, and Adrian Smith, R-Neb. We will continue to pursue all avenues to make sure parity is addressed. I want consumers to have a choice at the pump, whether that’s in February or July or November. Let’s work on making sure that happens this year.